Former NYPD Anti-Terrorism Officer Sentenced To Four Years In Prison For Narcotics, Fraud, Identity Theft, And Counterfeit Currency Offenses

  Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that REYNALDO LOPEZ, a former New York City Police Department (“NYPD”) officer, was sentenced to four years in prison in connection with narcotics, credit card fraud, identity theft, and counterfeiting offenses.  LOPEZ previously pled guilty to the charges on February 16, 2018, in Manhattan federal court before United States District Judge Edgardo Ramos, who also imposed LOPEZ’s sentence.

U.S. Attorney Geoffrey S. Berman said:  “Reynaldo Lopez betrayed and abused the trust placed in him by the NYPD and the people of New York.  He swore to protect the public from criminal activity, only to turn around and participate in significant crimes of his own, including not only credit card and identity fraud, but also agreeing to distribute multiple kilograms of heroin.  His sentence today is a reminder that this Office and its law enforcement partners will continue to fight this kind of corruption, and that no one is above the law.”

In sentencing LOPEZ, Judge Ramos said: “[LOPEZ] is an individual that we as a society trusted to enforce our laws, trusted him enough to give him a weapon, trusted him enough to go out into the streets and protect our communities, our children, our businesses, etc.  He is an individual with excellent resources who absolutely did not have to do what he did, absolutely did not have to engage in these crimes.”

According to the allegations in the Information to which LOPEZ pled guilty, a criminal complaint filed against LOPEZ, and other filings made in the case, and statements made during the plea and other proceedings in the case:

During the time periods charged, LOPEZ was an NYPD police officer assigned to the Anti-Terrorism Unit of the Transit Bureau.

On November 29, 2017, LOPEZ attempted to traffic approximately three kilograms of heroin from a location in New Jersey to the Bronx, New York.  LOPEZ agreed to transport and protect what he believed were three kilograms of heroin to a drug dealer located in the Bronx under LOPEZ’s protection as an NYPD police officer.  During the attempted transaction, LOPEZ described having previously engaged in narcotics trafficking and stated that “with me it’s guaranteed, they know for sure, they just send me out, do your thing, get an address, meet the person, do your thing, and I’m gone.”  LOPEZ was arrested when he attempted to make the delivery.

In addition, from May 2017 through November 2017, LOPEZ engaged in a scheme to create and utilize fraudulent credit cards, including by using stolen identity information.  He was part of a counterfeit credit card operation whose participants used stolen or otherwise illicitly obtained personal identifying information to create fraudulent credit cards, and then used those cards to purchase merchandise for themselves.  As part of his role in these crimes, LOPEZ also possessed and used a device that applies electronic data to blank physical credit cards.

Also from May 2017 through November 2017, LOPEZ possessed and used counterfeit United States currency.  In multiple recorded conversations, LOPEZ discussed his possession of counterfeit money and provided a sample to an undercover NYPD officer, stating that he previously had successfully used the counterfeit currency.

In addition to the prison term, LOPEZ, 27, of Brooklyn, New York, was sentenced to three years of supervised release.

Mr. Berman praised the outstanding investigative work of the Federal Bureau of Investigation and the NYPD Internal Affairs Bureau.

Mayor Of The Municipality Of Sabana Grande Indicted For Conversion Of Federal Funds, Fraud, And Money Laundering

In a separate indictment, two ex-employees of the municipality of Toa Baja indicted and arrested

  SAN JUAN, Puerto Rico– Miguel G. Ortiz-Vélez, a.k.a. “Papín”, mayor of the municipality of Sabana Grande has been indicted and arrested for his participation in a conspiracy to steal federal funds involving fraudulently obtained contracts from the PR Department of Education (PR DOE), announced U.S. Attorney Rosa Emilia Rodríguez-Vélez of the District of Puerto Rico. In a separate unrelated indictment, Victor Cruz-Quintero, former Director of Finance, and Ángel Santos-García, former interim Director of Finance of the Municipality of Toa Baja were charged with theft, conversion, and misappropriation of funds from the US Departments of Housing and Urban Development and Health and Human Services. The United States Department of Education, Office of Inspector General, and the Federal Bureau of Investigation are handling the Sabana Grande investigation. The Federal Bureau of Investigation, the United States Department of Housing and Urban Development, Office of Inspector General, and the United States Department of Health and Human Services, Office of Inspector General, are handling the Toa Baja investigation, with the collaboration of the PR Comptroller’s Office.

The indictment charging Ortiz-Velez, returned on July 2, 2018 by a federal grand jury in the District of Puerto Rico, includes six counts: two counts for theft of government money and property, one count for conspiracy to commit wire and mail fraud, two substantive counts of mail fraud, and one count for money laundering. He is also facing forfeiture allegations and a potential money judgment of $2,904,920.00, the value of the two contracts fraudulently obtained from the PR DOE.

According to the indictment, the defendant conspired with Irving Riquel Torres-Rodríguez (who previously pled guilty in two different cases), and others, to engage in deceptive conduct designed to fraudulently obtain federal funds from the US Department of Education and Puerto Rico Department of Education. As part of the agreement, those federal funds would be distributed to: the Municipality of Sabana Grande; Administrative, Environmental and Sports Consultants Corp. (AESC); Torres-Rodríguez- who was the owner of AESC; and others.

Defendant Ortiz-Vélez used his position as Mayor of Sabana Grande to defraud the PR DOE and to fraudulently obtain federal funds as follows:

• Ortiz-Vélez utilized his position as Mayor of Sabana Grande to obtain federal funds from the PR DOE based on material misrepresentations regarding the Municipality’s ability to perform the activities and the scope of the activities subject to the proposals. Ortiz-Vélez, as Mayor of Sabana Grande, subcontracted with AESC and Company F for the complete financing and administration of the projects without the knowledge or consent of the PR DOE. AESC then financed and administered the project for Company F, with an agreement that all profits would be split 40% for AESC and 60% for Company F.
• The Sabana Grande contracts with the PR DOE did not reflect the actual expenses incurred by AESC and Company F in providing the services. As a result, Ortiz-Vélez obtained net proceeds for the municipality, as well as net proceeds for AESC and Company F. For the first project, Verano Educativo, the AESC obtained approximately $549,286.10 in net profits and the Municipality of Sabana Grande obtained net proceeds of approximately $363,686.40, despite the project’s actual cost of approximately $221,747.50.
• For the second project, Desarrollo Contínuo, the Municipality of Sabana Grande, Company F, and AESC split approximately $1,330,612.45 in net profits from the PR DOE contract. The Municipality obtained net proceeds of approximately $391,988 and AESC obtained a net profit of $375,449.78. Company F obtained a net profit of $563,174.67, despite the project’s actual cost of approximately $439,587.55.
• During the period of this scheme, from in or about 2013 to in or about 2016, defendant Miguel G. Ortiz-Vélez received approximately $22,900 in cash contributions from AESC and Torres-Rodríguez.

The second indictment charges Victor Cruz-Quintero and Ángel Roberto Santos-García for, at different times, making unauthorized deposits and transfers of federal funds into the general account and payroll account of the Municipality of Toa Baja in order to pay the municipal payroll and to pay municipal contractors.

On or about October 28, 2014, defendant Victor Cruz-Quintero, as the finance director of the Municipality of Toa Baja, deposited approximately $2,538,164.41 in HUD Section 108 Loan Guarantee Program funds into the municipality’s general fund. These funds were utilized to make payroll payments to municipal employees and to pay various municipal contractors.

On various dates from September 2014 through February 2016, Victor Cruz-Quintero made additional deposits and transfers of federal funds from HHS and HUD to the general and payroll accounts of the Municipality of Toa Baja for unauthorized purposes. The indictment identifies seven separate transactions totaling over $1,750,000.While interim finance director of the Municipality of Toa Baja in approximately August and September 2015, defendant Ángel Roberto Santos-García made various transfers of federal funds from HHS and HUD to the general and payroll accounts of the Municipality of Toa Baja for unauthorized purposes. The indictment identifies three separate transactions totaling $650,000.

“Mayor Miguel G. Ortiz-Vélez deceived the public’s trust and used his public office to fraudulently obtain federal funds in order to supplement the finances of the municipality of Sabana Grande,” said U.S. Attorney Rosa Emilia Rodríguez-Vélez. “Corruption and fraud at any level of government betrays the ideals upon which our democracy is built. In regards with the investigation in Toa Baja, we will continue to follow the evidence in order to determine if other municipal officials were involved in the fraudulent scheme announced today.”

“The public must be able to trust the officials who are put in charge of government funds. Anyone who violates that trust will be brought to justice, because the citizens of Puerto Rico deserve no less. The FBI is proud to share this commitment with its partners from the United States Attorney’s Office, the Inspectors General for the Departments of Education, Housing and Urban Development, Health and Human Services, and the Office of the Comptroller of Puerto Rico,” stated Douglas Leff, Special Agent in Charge of FBI, San Juan.

The cases are being prosecuted by Assistant U.S. Attorney Seth Erbe. If found guilty, the defendants are facing possible sentences of up to 10 years for theft of government funds, misappropriation of federal program funds, and money laundering and up to 20 years for mail fraud, and the wire and mail fraud conspiracy.

The charges contained in the indictment are merely accusations. The defendants are presumed innocent unless and until proven guilty.

NYPD Officer Charged With Narcotics, Weapons, Fraud, Identity Theft, And Counterfeit Currency Offenses

  Joon H. Kim, the Acting United States Attorney for the Southern District of New York, William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and James P. O’Neill, the Police Commissioner of the City of New York (“NYPD”), announced the unsealing of a criminal complaint charging REYNALDO LOPEZ with attempting to traffic narcotics and using a firearm in furtherance of that offense, access device fraud, conspiracy to commit access device fraud, aggravated identity theft, and passing counterfeit obligations.  LOPEZ is a police officer with the NYPD, assigned to the Anti-Terrorism Unit in the Transit Bureau.  LOPEZ was presented yesterday before U.S. Magistrate Judge Debra Freeman.

Acting U.S. Attorney Joon H. Kim said:  “Reynaldo Lopez, a police officer sworn to serve and protect his community, instead allegedly engaged in a shocking crime spree.  Lopez allegedly attempted to traffic nearly three kilograms of heroin, stole people’s identities to create and use credit cards for his own use, and knowingly used counterfeit money.  Police officers who violate their oath and break the laws betray not only the public, but their fellow officers who have nobly committed themselves serving and protecting our communities.”

FBI Assistant Director William F. Sweeney Jr. said:  “The list of allegations Officer Lopez faces is troubling on many levels. Not only is Lopez accused of participating in a fraudulent credit card operation and a counterfeit money scheme, he’s also accused of misusing his position as a police officer to engage in the trafficking into our city of what he believed to be heroin.  The NYPD works diligently day in and day out to protect the public from those who engage in these types of crimes. As evidenced by the charges today, nobody is exempt from that practice.”

NYPD Police Commissioner James P. O'Neill said:  “Police officers are sworn to protect and serve the public.  As alleged, the defendant violated our oath, breaking the law, repeatedly, to traffic narcotics or steal others' identities.  Today he finds himself under arrest and charged criminally in federal court after eroding the trust we work on building every day with the public.”

According to the Complaint[1] unsealed today in Manhattan federal court:

LOPEZ is an NYPD police officer assigned to the Transit Bureau’s Anti-Terrorism Unit. 

On November 29, 2017, LOPEZ attempted to traffic approximately three kilograms of heroin from a location in New Jersey to the Bronx, New York.  LOPEZ agreed with another undercover police officer (“UC-2”) to transport what LOPEZ believed were three kilograms of heroin to a drug dealer located in the Bronx, New York, under LOPEZ’s protection as an NYPD police officer, and was arrested when he attempted to make the delivery.  LOPEZ also possessed a firearm in furtherance of this attempted narcotics trafficking.

From May 2017 to the present, LOPEZ engaged in a scheme to create and utilize fraudulent credit cards, including by using identity information stolen from his victims.  He was part of a counterfeit credit card operation whose participants used stolen or otherwise illicitly obtained personal identifying information to create fraudulent credit cards, and then used the fraudulent credit cards to purchase merchandise for themselves.  As part of his participation in these crimes, LOPEZ also possessed and used a device that applies electronic data to blank physical credit cards.

From October 2017 to the present, LOPEZ possessed, passed, and used counterfeit United States currency.  In multiple recorded conversations with an undercover NYPD officer (“UC-1”), LOPEZ discussed his possession of counterfeit money, stating that he previously had successfully used some of the counterfeit currency.  LOPEZ also showed UC-1 a stack of currency that LOPEZ claimed was counterfeit, and provided UC-1 with a counterfeit $100 bill.

LOPEZ, 26, of Brooklyn, New York, was arrested yesterday in the Bronx, New York.  LOPEZ is charged with one count of access device fraud, which carries a maximum sentence of 15 years in prison; one count of conspiracy to commit access device fraud, which carries a maximum sentence of five years in prison; one count of aggravated identity theft, which carries a mandatory sentence of two years in prison; one count of passing counterfeit obligations, which carries a maximum sentence of 20 years in prison; attempted possession of one kilogram and more of mixtures and substances containing heroin, which carries a mandatory minimum sentence of 10 years in prison and a maximum of life in prison; and firearms use, carrying, and possession in connection with a narcotics trafficking offense, which carries a mandatory sentence of five years in prison.

The statutory minimum, maximum, and mandatory penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge.

Mr. Kim praised the FBI and the NYPD for their outstanding work on the investigation.  He added that the investigation is continuing.

 

[1] The charges contained in the Complaint are merely accusations, and LOPEZ is presumed innocent unless and until proven guilty.

Operation Vandelay Industries: A.G. Schneiderman Announces Indictments In Three Counties, Charging Alleged Fake Architect With 58 Counts Of Larceny, Forgery, Fraud, And Unlicensed Practice Of Architecture

Paul J. Newman Allegedly Collected Nearly $200,000 For Rendering Fraudulent Architecture And Design Services Since 2010

Newman Drafted Architectural Renderings For Over 100 Commercial And Residential Properties In Albany, Rensselaer, And Saratoga Counties And Allegedly Affixed Fraudulent Stamps To Over 1,000 Building Plans And Inspections

Schneiderman: My Office Will Not Tolerate Misconduct That Jeopardizes New Yorkers’ Safety And Erodes Public Trust

  NEW YORK STATE  Attorney General Eric T. Schneiderman announced today the unsealing of three indictments charging Paul J. Newman, President of Cohesion Studios, Inc., with defrauding construction companies, business owners, and municipalities throughout the Capital Region by pretending to be a licensed and registered architect. 

The Attorney General’s investigation, “Operation Vandelay Industries,” revealed that Newman allegedly drafted architectural renderings for over 100 properties in Albany, Rensselaer, and Saratoga Counties. Newman allegedly submitted these architectural renderings, as well as foundation inspections, field reports, energy compliance certificates, and engineer letters, to various towns and cities, falsely certifying on the documents that he was a registered and licensed architect and affixing a forged New York State Registered Architect Stamp or Professional Engineer Stamp.

“As we allege, for over seven years the defendant has pretended to be a Registered Architect, deceiving hundreds of New Yorkers – including families and senior citizens — with the sole goal of enriching himself,” said Attorney General Schneiderman. “By allegedly falsifying building plans, code compliance inspections, and field reports, the defendant jeopardized the safety of those who resided in and frequented the buildings he was contracted to work on. Deceptive actions like these erode public trust — and my office will not tolerate them.”

“The State Education Department's Office of the Professions investigates and prosecutes professional misconduct in more than 50 licensed professions to help protect New Yorkers,” said State Education Commissioner MaryEllen Elia. “We are grateful for our continuing partnership with Attorney General Schneiderman and his team of professionals as we work together to ensure the safety of the public is protected against the dangers of unlicensed practice.”

According to statements by the prosecutor at arraignment, since at least 2010, Newman has been presenting himself as an architect to multiple municipalities in the Capital Region.  Newman allegedly advertised his architectural services on various social media outlets until he became aware that a complaint had been filed with the New York State Education Department (“NYSED”), Office of the Professions. Soon after, Newman removed any reference to “architecture” in his ads and replaced it with “design.”   In June 2015, investigators from NYSED, Office of the Professions received a complaint alleging that Newman was practicing architecture without a license. In May 2016, following the NYSED investigation, the matter was referred to the Attorney General’s Criminal Enforcement and Financial Crimes Bureau.

According to statements made by the prosecutor at arraignment, Newman, as the sole employee of Cohesion Studios, Inc. (“Cohesion”), a Rensselaer-based architectural design company, was contracted to create architectural renderings and provide additional architectural services for the following projects:

• The Pastures Project, Town of North Greenbush, Rensselaer, New York
  • Between 2010 and 2015, Newman was hired as the architect for the development of more than 70 townhouses, receiving in excess of $50,000 for his services
• The Livingston Project, City and County of Albany, New York
• Between 2012 and 2014, Newman was hired as the architect for the development of a multi-story senior living community, receiving in excess of $40,000
• The Lofts Project, Town of Malta, Saratoga, New York
• Between 2014 and 2016, Newman was the Project Architect for the construction of a 214-unit multifamily apartment community, receiving in excess of $35,000
• The Vistas Project, Town of Clifton Park, Saratoga, New York
• Between 2011 and 2014, Newman was hired as the architect for the development of more than 25 townhouses, receiving in excess of $35,000
• The Hannoush Jewelers Project, Town of Colonie, Albany, New York
• Between 2011 and 2012, Newman was hired as the architect on a renovation project for a jewelry store, receiving in excess of $20,000
• The Ballston Senior Living Project, Town of Ballston, Saratoga, New York
• Between 2012 and 2013, Newman was hired as the architect for the development of a multi-story senior living community, receiving in excess of $8,000

According to prosecutors, Newman allegedly took the license number of a registered architect that he found on the internet and created a fictitious Registered Architect Stamp using that number and his own name; Newman then affixed this fraudulent stamp to various inspection letters submitted to municipalities across the state.  Newman also allegedly took the Professional Engineer Stamp of a licensed engineer that he worked with on one or more projects and fraudulently affixed a copy of the stamp, with a forged signature, to over 1,000 pages of building plans for the projects listed above.  Finally, Newman allegedly affixed fraudulent stamps and used the title “architect” on energy compliance certificates, foundation inspections, field reports, and AIA certificates.

In Saratoga County, Newman is charged with one count of Grand Larceny in the Third Degree, a class D felony; thirteen counts of Forgery in the Second Degree, a class D Felony; one count of Scheme to Defraud in the First Degree, a class E felony; three counts of Unauthorized Practice of a Profession, a class E felony; and thirteen counts of Offering a False Instrument for Filing in the First Degree, a class E felony.  Newman, 49, was arraigned on April 17, 2017 in Saratoga County Court before the Honorable James A. Murphy, III.  The defendant was remanded on the 31-count indictment.

In Rensselaer County, Newman is charged with one count of Grand Larceny in the Second Degree, a class C felony; nine counts of Forgery in the Second Degree, a class D Felony; one count of Scheme to Defraud in the First Degree, a class E felony; one count of Unauthorized Practice of a Profession, a class E felony; and nine counts of Offering a False Instrument for Filing in the First Degree, a class E felony.  Newman, was also arraigned on April 17, 2017 in Rensselaer County Court before the Honorable Debra J. Young.  The defendant was remanded on this 21-count indictment, pending a written bail application.  

In Albany County, Newman is charged with two counts of Forgery in the Second Degree, a class D Felony; one count of Scheme to Defraud in the First Degree, a class E felony; one count of Unauthorized Practice of a Profession, a class E felony; and two counts of Offering a False Instrument for Filing in the First Degree, a class E felony.  Newman was arraigned on April 19, 2017, in Albany County Court before the Honorable William A. Carter.  The defendant was remanded on this six-count indictment, pending a written bail application.  

If convicted of the highest count charged, Newman faces up to 5 to 15 years in prison.

The charges against the defendant are allegations and the defendant is presumed innocent unless and until proven guilty.